The National Board of Revenue has rejected a plea of Grameen Bank seeking tax exemption on its income for the period of six months with retrospective effect from January 2011 to June 2011.
The tax authority has taken the decision in its last board meeting saying that there was no scope in the Income Tax Ordinance-1984 to provide such exemption with retrospective effect, NBR officials said.
The GB had enjoyed tax exemption facility from its inception in 1983 to December 2010. But the decision of extending the facility to GB was pending until June 2012 when the NBR had again provided tax exemption facility for 4 years and 6 months until December, 2015 with retrospective effect from July 2011.
In the process, the period from January 2011 to June 2011 had been left out of the exemption facility.
A summery of the NBR’s decision will be sent to finance minister Abul Maal Abdul Muhith for his approval, they said.
Grameen Bank, Nobel-winning microfinance institution of the country, earlier paid Tk 10 crore in advance income tax in the fiscal year 2011-2012 amid uncertainty about getting exemption because of delay in decision of the government at that time.
In May, Grameen Bank chairman Khondaker Muzammel Huq sent a letter to NBR seeking exemption of all types of taxes including income tax, super tax and business profit tax of the bank for the period.
The letter said that the GB had already completed its annual financial statement for the year 2011 as it follows January-December as financial year.
If tax exemption is not provided, the bank will have to prepare half-yearly financial statement based on credit and deposit accounts of the 84 lakh members of the bank which is time-consuming, tough and problematic for the bank, the letter stated.
It said that the above mentioned six months had been left out as the NBR considered the financial year from June to July or it might have been simply printing mistake or unwillingly done mistake.
So the NBR should provide tax exemption to the bank for the period so that it can solve the problems and the tax exemption facility remained unbroken, it said.
‘Under the existing law, the revenue board cannot exempt any tax with retrospective effect that has already been paid after admitting the tax liability for any previous years by the taxpayers,’ a high tax official told New Age on Monday.
Usually, the statutory regulatory order (SRO) mentions about the date of effectiveness of the given exemption.
Now, the GB can get exemption for above mentioned period only then if the government passes any law in parliament providing such exemption, he said.
A summery on this issue will be sent to the finance minister very soon, he said.
He said that Grameen Bank will be informed about the decision after getting approval from the finance minister.
-With New Age input
